By its very nature, insurance is designed to protect customers against future risk. So, why do so many providers prop up the very fossil fuel industries that are going to cause us and the planet so much harm?
This is the question that inspired Matt Criddle to launch Naturesave Insurance, Britain’s greenest insurance provider, which has just reached an unusual milestone: giving away GBP1m of its income.
Each year, Naturesave takes 10 per cent of the income it receives from its home and travel premiums, and puts it in a connected charity, the Naturesave Trust. The trust hit the GBP1m milestone earlier this year, some 25 years after it was founded – no small feat for a business that employs only 12 people.
That sum equates to 13 per cent of Naturesave’s total trading income since it was founded. Through the trust, it has been donated to grassroots environmental projects across the UK via grants of between GBP500 and GBP5,000 apiece. They have funded bike repairs in HM Prisons, community agriculture projects, repair cafes and many more schemes that benefit people and planet.
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“The trust primarily funds quite small but interesting projects, such as community orchards, that often struggle to attract funding from the bigger funding bodies,” explains Criddle. “At the moment we are supporting a solar beehive project.”
Spread across six sites in the south of England, the project features thermo-solar beehives that use the power of the sun to eradicate varroa mites, which kill bees, without harming the pollinators themselves.
When Naturesave Insurance was established in 1993, giving away part of a firm’s income or profits was considered radical – especially the notion that small businesses might choose to do so. It remains rare to give away such a high proportion, although there is a global trend towards companies becoming more philanthropic.
In the US, for example, philanthropic enterprise programmes are springing up to help firms give away profits in a sustainable way.
So, what motivated Naturesave to go down this route? Criddle is a lifelong environmentalist, and an entrepreneur. “I wanted to put right some of the wrongs I saw in the insurance industry and build something that was both ethical and sustainable,” he tells Positive News.
The “wrongs” include the fact that the insurance industry is the second biggest investor in fossil fuels after banks, and also underwrites and insures all new coalmines, and oil and gas exploration projects. “All that stuff we should no longer be doing can only happen with insurance. If every company refused to underwrite coalmines, then they would cease to open any new ones,” Criddle notes.
The decision to give away so much has helped to shape the business, he explains. “First of all, it attracts staff who share a sense that they are doing something with meaning, so you end up with people in the organisation who actually care. The same thing happens with our partners: our business and customer relationships are stronger. Our approach has attracted an altruistic and ethically driven client base who are extremely loyal.”
Our approach has attracted an altruistic and ethically driven client base who are extremely loyal
The company also has one of the highest retention rates in the insurance industry: around 96 per cent. Customer loyalty is another reason to continue giving away a share of income. Many have been with Naturesave for more than 20 years.
That said, taking such a strong ethical stance means that customers expect a lot. “We cannot operate a volume driven ‘call centre ethos’, instead we have to treat clients with real care and provide a bespoke service,” notes Criddle.
Naturesave is certainly on to something. A landmark Harvard University report in 2013 found companies that practise ‘compassionate capitalism’ perform 10 times better than those that don’t.
More recently, research by the World Economic Forum concluded that “business-as-usual is no longer adequate for the challenges of the 21st century”. The traditional focus on shareholder value is neither right nor fair, it found: corporate purpose should be about solutions, not just profits.
A popular initiative to encourage this kind of giving is 1% for the Planet, a charitable platform created by Yvon Chouinard, founder of the outdoor clothing brand Patagonia. The platform encourages businesses to donate 1 per cent of their turnover to environmental causes. It launched in 2002 but has grown in popularity in recent years. Some 3,419 businesses in 64 countries have now signed up.
In a blog, Chouinard wrote: “It’s a cost of doing business on this planet. It’s not philanthropy – it’s an absolute necessity for us living on this planet. It’s the opposite of doing nothing.”
It’s not philanthropy – it’s an absolute necessity for us living on this planet
In the UK, EarthBits, an online shop selling plastic-free cosmetics and cleaning products, is in the process of applying to join 1% for the Planet. The business already donates a percentage of its revenue to fund international tree-planting projects, but wanted to go further.
“A lot of companies nowadays use sustainability as a marketing tool, as it is becoming quite a trendy thing to do. Joining these projects is a way for us to show this business is not only a job for us, but a way of living that we fully embrace,” explains EarthBits co-founder Francesca Castaldelli.
UK sustainable toy maker Capikooa, which specialises in making wooden balance boards for children, has an environmental and social mission embedded in its company’s articles and is also a member of 1% for the Planet. Maria Bataller, Capikooa’s co-founder, agrees that customers are becoming increasingly savvy when choosing what brands to buy from.
“The majority of our customers like to know where the wood we use comes from, where it is made and that they are supporting good causes by shopping with us,” she says.
And the trend is reflected in research. In fact, 81 per cent of global ‘consumers’ feel strongly that companies should help to improve the environment, according to Neilsen’s 2019 Global Responsibility & Sustainability Report.
Back in Devon, Criddle insists that giving away income to help the environment is a win-win. “By doing so, customers recognise us as an authentic and forward-thinking company, which is genuinely trying to making a difference. I think that’s one of the reasons that ethical companies succeed.”
When it comes to customer loyalty, he says, the decision has certainly helped Naturesave: “People have a lot of time for us.”
Illustration: The Project Twins
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A growing number of businesses are diverting revenues to progressive causes, including one small firm that has just given away GBP1m
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